Watchdog poised to name suspects

THE Financial Service Authority is poised to relax its ban on naming individuals and companies it suspects of breaching financial regulations.

FSA chairman Sir Howard Davies - who retires next month - says in some cases its secrecy has been inappropriate.

He told a Sunday newspaper: 'There has been a lot of popular pressure saying that the regulatory system looks ridiculous if there is an obvious case for investigation and the FSA says, 'Can't say if we are investigating, can't say if we are not'. We have concluded that we ought to relax this policy to some degree. And in order to do that, we need to consult.'

He conceded that there were dangers. 'Obviously the risk for us is that, if we do say something, people then pile in and say, 'It's an investigation, you've prejudged it'.'

In the autumn, the FSA will lay down a new policy on what it can announce about probes, having sought views from the City, business and the media.

Davies said disclosure of a probe may justified when public confidence in the regulator's ability to keep up with the play is at risk, or when consumers may continue to be at risk without a warning.

Meanwhile, the FSA has signed an agreement with the City of London Police to cooperate in cases of financial crime. The deal could lead to arrests within the next few weeks.